Norsk Hydro ASA yesterday issued a notice of force majeure to buyers of its bauxite, as a lack of water in the area has prevented Brazilian miner Mineração Rio do Norte (MRN) from delivering sufficient levels of ore to cover its contractual obligations.
The firm advised bauxite customers that a drought in the region has left the mining operation without enough water to run its tailing systems. According to calculations, the drought will reduce MRN’s output this year from between 17 million and 17.5 million metric tons to between 15 million and 15.5 million metric tons.
Norsk notes that, as the shortfall is of dry bauxite destined to export, alumina production at Alumina do Norte do Brasil S.A. (Alunorte) is not currently believed to be affected.
MRN, in which Hydro holds a 5% ownership interest and purchases 40% of the mine’s production, has a nameplate capacity of 18 million metric tons per annum, placing it among the world’s biggest bauxite mines. The venture was begun in 1979 as a joint venture and is currently owned by Vale SA, South32, Rio Tinto, Companhia Brasileira de Aluminio CBA, Alcoa Alumínio S.A., Alcoa World Alumina and Chemicals (AWAC), and Hydro. The mine is located at Porto Trombetas in the Brazilian northern state of Pará.
Norsk Hydro, which was founded in 1905, financed by the Swedish Wallenberg family and French banks, began its life named Norsk hydro-elektrisk Kvælstofaktieselskab (literally, “Norwegian hydro-electric nitrogen limited”) by Sam Eyde. The Norwegian government owns approximately 40% of the company at the present time. Norsk Hydro is one of the largest aluminium companies in the world, with plants in Rjukan, Raufoss, Vennesla, Karmøy, Høyanger, Årdal, Sunndalsøra, and Holmestrand. Norsk also has several plants abroad, including in Germany and Brazil.